Earlier today, Volkswagen held a press conference at its headquarters in Wolfsburg, Germany, to update the world about the automaker's ongoing emissions scandal. VW CEO Matthias Müller and chairman Hans Dieter Pötsch discussed the roots of the problem, VW's proposed fixes for some of the affected cars, and the company's reorganization plans.

Further Reading

Further Reading

In fact, VW has two separate emissions problems. The first came to light in September, when the US Environmental Protection Agency sent a notice of violation to VW informing the car maker that 500,000 diesel-engined cars would have to be recalled over "defeat device software" embedded in their engine control units. VW's four-cylinder EA 198 diesel engine contains code that detects when a car undergoes an emissions test and adjusts the engine tuning. This decreases the amount of NOx compounds produced in the exhaust to legal limits, allowing the vehicle to pass the test at the cost of reduced power (and therefore efficiency).

A second issue was revealed last month, discovered during VW's internal investigation of the scandal. This time it affects VW group with 1.4L cars sold in Europe. The company at first reported that it had sold up to 800,000 cars that emitted significantly more CO2 than claimed during type approval, but more recently it has downgraded this number to just 36,000.

Individual misconduct and cultural failures

In the press conference, Pötsch said that blame for the NOx cheating was caused in part by "individual misconduct" as well as failed internal procedures and a culture in some departments "that tolerated breaches of the rules." All of this was caused by a desire to expand diesel sales in the US, a desire that wasn't matched with sufficient time or budget to develop engines that fully complied with the tough NOx emissions regulations of the US.

"Looking back, we regrettably have to realize that the developers of the EA 198 project simply couldn't find a way to meet tougher US NOx limits by permissible means. Or at least a way... which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOx levels by various means such as adjusting exhaust gas recirculation levels depending on whether the vehicle was on the road or on a test bench," Pötsch said.

Even when technical solutions did become available, "they were not used in the mistaken interest of customers," he said.

Internal remedies will include new processes for developing and approving ECUs, as well as upgraded IT systems that will help VW track its work and employees better. VW will also release real-world emissions data and will use third parties to verify the numbers in future.

Pötsch then addressed the V6 engine used by Audi and Porsche. Unlike the EA 198 engine, the V6 diesel uses the same software whether it's on the road or being tested; the issue is an auxiliary device that warms the catalytic converter for cold starts. "Audi will be presenting a technical solution to CARB [the California Air Resources Board] and the EPA as swiftly as possible, once it has been approved," Pötsch said.

Later in the conference, CEO Müller announced that a fix is in the works for European EA 198 engines, and that VW hopes to have the recall concluded by the end of 2016. But the company is still working on something similar for affected US cars. "The situation in the United States is more complicated than it is in Europe, Müller said. "That is in part due to the much tighter NOx levels on the other side of the Atlantic, so retrofitting the vehicles there to meet valid emissions limits is quite simply a much bigger technical challenge. We are in a constant and intensive dialogue with both US agencies (the EPA and CARB) and we believe we have made significant progress in recent weeks. But I trust you all understand we can only announce our solution concepts for North America once they have been fully and finally coordinated with the authorities there."

With regards to the CO2 cheating in Europe, Pötsch said that the number of cars affected is much smaller than the 800,000 initially reported, and that the financial implications for VW will be much less than the €2 billion the company had set aside.